Vanke sales slow in April, but property market still growing

Firm's year-on-year figures reveal 66.39 percent increase in revenue

China Vanke Co Ltd, the nation's largest real estate developer by sales, has posted a significant drop in April revenue from March, in a clear sign that the government's efforts at curbing housing prices have started to affect major developers.

Its revenue fell 18.55 percent month-on-month to 12.38 billion yuan ($2.01 billion) in April, it revealed in a filing to the Shenzhen Stock Exchange.

However, the industry giant's year-on-year figures showed the property market is still growing.

The company sold 1.1 million square meters of residential floor space during the month, a 44.3 percent rise on April 2011, while its 12.38 billion yuan April revenue represents a 66.39 percent year-on-year increase.

Vanke sold 1.27 million sq m of space and generated 15.2 billion yuan of revenue in March, a 26-month high.

Ning Jingbian, an analyst with China International Capital Corp, said he expects Vanke to post 165 billion yuan in annual sales revenue, against its 141.2 billion yuan in 2012.

"The company has completed 26 percent of its yearly target in the first quarter, which is better than its average rate of 21 percent over the last five years," Ning said.

In other recent results, Hong Kong-listed Hopson Development Holdings Ltd reported upbeat sales which surged 51 percent year-on-year to 3.5 billion yuan from January to April, but its sales in April also declined 20 percent from March.

Guangzhou R&F Properties Corp remains the only listed property developer to achieve month-on-month growth in revenue in April. The Hong Kong-listed company recorded 3.7 billion yuan in April revenue, a 28.5 percent growth year-on-year, against 3.4 billion yuan of sales in March.

But despite the April sales dips, developers remain confident and are still buying land plots, said Su Xuejing, an industrial analyst with China Securities.

Land sales are showing a similar trend as they declined in April, but are expected to pick up in May, he said.

China Index Academy, a research institute attached to the country's largest real estate website, SouFun Holding Ltd, said on Tuesday that 635 land plots were traded in the nation's 300 cities in April, a drop of 18 percent compared with March, but a 13 percent rise year-on-year.

Total traded space across the 300 cities declined 21 percent month-on-month, but edged up 3 percent year-on-year.

The average land trading price for residential floor space grew 5 percent month-on-month to 1,062 yuan per sq m nationwide, but surged 32 percent year-on-year.

Residential land transactions grew in seven out of the top 10 major cities year-on-year, said China Index Academy, with numbers in Hangzhou soaring by 2,096 percent, Beijing 381 percent and Shanghai 133 percent.

Vanke said it had acquired space for 11 new projects for 6.5 billion yuan since March, and it has sped up its pace of land purchasing after the announcement of the latest tightening policies.

"Prime land plots will continue to be chased by major developers even in this toughening policy environment," Su added